Private equity firm Duke Street’s plans to source new capital for deals have suffered a setback after an agreement with Goldman Sachs struggled to take off.

Duke Street is on a quest for money to do new deals after abandoning an €850 million fundraising in 2012.

Last May it hired advisory firm Canaccord Genuity to help find buyers for stakes in its 2007 fund. Potential investors were given the chance of committing new capital to Duke Street if they acquired a stake.

However, people familiar with the situation have said that only a handful of existing Duke Street investors have decided to sell out to Goldman Sachs.

As a result, Goldman Sachs has fallen short of its targeted investment in the Duke Street stakes and has not provided the private equity firm with any capital for new deals.

People said that the agreement between the two firms was not over. One person familiar with the matter said Goldman Sachs had explored the option of providing “single digit millions” to Duke Street for new deals, and added the “door was still open” for the bank to provide the firm with capital.

People familiar with the matter said some of Duke Street’s investors had chosen not to sell their fund stakes due to some encouraging exits made by the firm in the last year. In the last 12 months the firm has sold private dentist chain Oasis Healthcare, payment company Payzone, and debt management firm Marlin.

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In recent years, Duke Street has operated a deal-by-deal model, buying funeral operator LM Funerals, and healthcare company Air Products & Chemicals.

Shortly after appointing Canaccord Genuity last year, Duke Street sold a 35% stake in its management vehicle to French alternative investor Tikehau last year, with the investor supporting the firm’s hunt for new deals.

The firm is planning to raise a £150 million to £200 million pool of permanent capital for new deals, according to people familiar with the matter.